Whether it is the media’s focus or just human nature, the business world seems to be divided into two types of companies — those that grab all the headlines and those that fly under the radar.
You might assume that the headline-grabbing companies are the success stories and the under-the-radar businesses muddle along as mediocre enterprises. But when you look deeper that is clearly not the case.
A huge swath of the nation’s businesses operate successfully outside the glare of the media spotlight. Many of these companies are models of business execution, innovation and growth. They might be considered “boring” by people obsessed by the next big thing, but their sustainable success year after year makes them a critical part of the bedrock of the U.S. economy.
There are hundreds of examples of this phenomenon. But two examples stick out and show why “boring” should never be underestimated or underappreciated.
Danaher unlocks the code
Danaher Corporation is a conglomerate that includes diverse manufacturing and life sciences businesses. But the true key to the company’s success (Danaher has outperformed the S&P 500 by 1,200 percent over the past 20 years) is its business operating system.
The key here is execution. Danaher isn’t in cloud computing or semi-conductor manufacturing — industries with remarkable cyclical growth trends. Instead it has brands that are hardly recognizable like Videojet, which prints “best-by” dates and barcodes on food products. But they find repeatable, long-term growth through an innovative business system that gets the best from each employee, business division and company in its portfolio. Having the best idea doesn’t always win in business. Oftentimes it is the internal operations of a business that dictate success.
As the old business adage goes about investing in “A teams with a B idea rather than B teams with an A idea,” Danaher found a way to create A teams across many companies, and that model has proven immensely successful even though it has none of the headline appeal of a social media startup or electric car company.
Jack Henry and Associates shows technology is not all apps and social media
When you think of technology companies, most people’s minds go directly to Facebook, Twitter, Apple and Amazon. But technology permeates everything we do, and some of those technology platforms embedded in our daily life don’t make the news every day. Jack Henry and Associates develops and deploys little-known technology platforms that power banking systems and financial transactions.
The company has gained little of the notoriety of its more public-facing technology peers, but the company has grown into a highly successful business in its own right, building on a technology that is vital to the U.S. economy and to banking institution’s competitiveness in the mobile and digital age.
Since it became a publicly traded company in 1985, the company has been a standout performer, growing revenue, acquiring other technology and becoming a remarkable long-term winner for shareholders. The business performance is on-par with any of the companies that make headlines regularly, but Jack Henry flies under the radar because what its technology does is less public-facing than many others.
The company is an example of a superior technology application in a sector that is investing heavily in digital infrastructure. While other technology companies were soaking in the spotlight, this financial platform was happy to build a powerful, thriving business far away from the headlines in a thriving sector of the U.S. economy. And it is a lesson that technological disruption touches many different industries in many different ways, and some of the long-term business opportunities are not always all in the most high-profile sectors.
Finding a niche and thriving in that niche doesn’t have to mean that you think smaller or pare down your business goals. As Jack Henry and Associates proves, becoming an industry leader in a lucrative corner of the U.S. economy can be a recipe for remarkable success.
John Solari is the managing partner of J.A. Solari & Partners. He has 25 years of accounting experience and is also a member of the American Institute of Certified Public Accountants and the Nevada Society of Certified Public Accountants.